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b/approved/0135-compressed-blob-prefixes.html @@ -90,7 +90,7 @@ diff --git a/approved/0139-faster-erasure-coding.html b/approved/0139-faster-erasure-coding.html index 8ed0333..6ffb700 100644 --- a/approved/0139-faster-erasure-coding.html +++ b/approved/0139-faster-erasure-coding.html @@ -90,7 +90,7 @@ diff --git a/approved/0146-deflationary-fee-proposal.html b/approved/0146-deflationary-fee-proposal.html index 5e74c12..9d0c46d 100644 --- a/approved/0146-deflationary-fee-proposal.html +++ b/approved/0146-deflationary-fee-proposal.html @@ -90,7 +90,7 @@ diff --git a/approved/0149-rfc-1-renewal-adjustment.html b/approved/0149-rfc-1-renewal-adjustment.html index 50775d1..b393ebd 100644 --- a/approved/0149-rfc-1-renewal-adjustment.html +++ b/approved/0149-rfc-1-renewal-adjustment.html @@ -90,7 +90,7 @@ diff --git a/index.html b/index.html index aa44354..7cf5a38 100644 --- a/index.html +++ b/index.html @@ -90,7 +90,7 @@ diff --git a/introduction.html b/introduction.html index aa44354..7cf5a38 100644 --- a/introduction.html +++ b/introduction.html @@ -90,7 +90,7 @@ diff --git a/print.html b/print.html index 4cbe228..1d78a12 100644 --- a/print.html +++ b/print.html @@ -91,7 +91,7 @@ @@ -5094,43 +5094,44 @@ This approach is compatible with the Slot-Based collation and the currently depl

(source)

Table of Contents

-

RFC-0155: Polkadot$

+

RFC-0155: pUSD (Polkadot USD over-collateralised debt token)

@@ -5138,48 +5139,50 @@ This approach is compatible with the Slot-Based collation and the currently depl
Start Date2025-09-11
DescriptionPolkadot native stablecoin on Asset Hub

Summary

-

Polkadot$ / Polkadot Dollar / PDD (exact name TBD) is a new DOT-collateralized stablecoin deployed on Asset Hub. It is an overcollateralized stablecoin backed purely by DOT. The implementation follows the Honzon protocol pioneered by Acala.

+

pUSD (Polkadot USD over-collateralised debt token) is a new DOT-collateralized stablecoin deployed on Asset Hub. It is an overcollateralized stablecoin backed purely by DOT. The implementation follows the Honzon protocol pioneered by Acala. In addition, this RFC introduces an opt-in pUSD Savings module that lets holders lock pUSD to earn interest funded from stability fees.

Motivation

"Polkadot Hub should have a native DOT backed stable coin because people need it and otherwise we will haemorrhage benefits, liquidity and/or security." - Gav

-

Primary use cases of PDD:

+

Primary use cases of pUSD:

Stakeholders

Explanation

-

PDD is implemented using the Honzon protocol stack used to power aUSD, adapted for DOT-only collateral on Asset Hub.

+

pUSD is implemented using the Honzon protocol stack used to power aUSD, adapted for DOT-only collateral on Asset Hub.

Protocol Overview

The Honzon protocol functions as a lending system where users can:

  1. Deposit collateral: Lock DOT as collateral in Collateralized Debt Positions (CDPs).
    2. -
  2. Mint PDD: Generate PDD stablecoins against collateral value.
    3. -
  3. Accrue interest: Pay interest over time via the debit exchange rate.
    4. +
  4. Mint pUSD: Generate pUSD stablecoins against collateral value.
    5. +
  5. Accrue interest: Pay interest over time via the debit exchange rate (stability fee).
  6. Maintain health: Keep CDPs above the liquidation ratio to avoid liquidation.
  7. Liquidation: Underwater CDPs are liquidated via DEX and/or auctions to keep the system solvent.

Oracle Infrastructure

-

The PDD system relies on robust oracle infrastructure to maintain accurate price feeds for DOT and ensure proper collateral valuations.

+

The pUSD system relies on robust oracle infrastructure to maintain accurate price feeds for DOT and ensure proper collateral valuations.

Oracle source

Price aggregation mechanism

Issuance

-

DOT holders can open a vault (CDP) to lock their DOT and borrow up to a protocol-defined percentage of its value as PDD, subject to a required collateral ratio and debt ceilings.

+

DOT holders can open a vault (CDP) to lock their DOT and borrow up to a protocol-defined percentage of its value as pUSD, subject to a required collateral ratio and debt ceilings.

Redemption

-

At any time, the vault owner can repay PDD (principal plus accrued interest via the debit exchange rate) to unlock DOT, fully or partially.

+

At any time, the vault owner can repay pUSD (principal plus accrued interest via the debit exchange rate) to unlock DOT, fully or partially.

Liquidation

When a vault's collateral ratio falls below the liquidation ratio, it becomes unsafe and is liquidated. The system employs a tiered liquidation approach to maximize efficiency and minimize market impact.

Primary liquidation: DEX-first approach

@@ -5203,14 +5206,55 @@ This approach is compatible with the Slot-Based collation and the currently depl
  • Bad debt handling: Any shortfalls become bad debt managed by CDP treasury mechanisms.

    • Any excess collateral after repaying debt and penalties is refunded to the owner. Shortfalls become bad debt and are handled by CDP treasury mechanisms.

    +

    Incentives: pUSD Savings (opt-in)

    +

    The protocol includes a Savings module that allows pUSD holders to lock tokens and earn interest paid from stability fees.

    +

    Design goals

    + +

    Mechanics

    + +

    Parameter examples (TBD by governance)

    +

    Governance

    A Financial Fellowship (within the broader Polkadot on-chain governance framework) will govern risk parameters and Treasury actions to ensure economic safety. The Fellowship can also perform emergency actions, such as freezing the oracle price feed if manipulation is detected.

    +

    Governance-managed parameters include (non-exhaustive):

    +

    Emergency Shutdown

    -

    As a last resort, an emergency shutdown can be performed by the Fellowship to halt minting/liquidation and allow equitable settlement: lock oracle prices, cancel auctions, and let users settle PDD against collateral at the locked rates.

    +

    As a last resort, an emergency shutdown can be performed by the Fellowship to halt minting/liquidation and allow equitable settlement: lock oracle prices, cancel auctions, and let users settle pUSD against collateral at the locked rates. Savings deposits remain redeemable 1:1 for pUSD at the last savings index; interest accrual stops at shutdown.

    Drawbacks

    Testing, Security, and Privacy

    Testing requirements

    @@ -5219,42 +5263,48 @@ This approach is compatible with the Slot-Based collation and the currently depl
  • Integration testing with the Asset Hub DEX to ensure adequate liquidity for liquidation swaps.
  • Emergency-shutdown procedure testing to ensure graceful system halt and equitable settlement.
  • Economic testing of incentive structures for liquidators and system stability.
    • +
  • Savings accounting tests: exchange-rate accuracy, fee-waterfall correctness, boundary cases on caps/cooldowns, and epoch transitions.

    • Security considerations

    Performance, Ergonomics, and Compatibility

    Performance

    -

    This proposal introduces necessary computational overhead to Asset Hub for CDP management and liquidation monitoring. The impact is minimized through:

    +

    This proposal introduces necessary computational overhead to Asset Hub for CDP management, liquidation monitoring, and Savings accounting. The impact is minimized through:

    Ergonomics

    The proposal optimizes for several key usage patterns:

    Compatibility

    Prior Art and References

    The implementation follows the Honzon protocol pioneered by Acala for their aUSD stablecoin system. Key references include:

    Unresolved Questions

    Smart-Contract Liquidation Participation

    @@ -5265,11 +5315,11 @@ This approach is compatible with the Slot-Based collation and the currently depl
  • Custom logic: Registered smart contracts can implement custom liquidation strategies, such as gradual liquidation over time or cross-chain liquidation via XCM bridges.

    • Treasury Payment Transition

    -

    In a later phase, staking rewards may be paid in PDD instead of DOT inflation, requiring:

    +

    In a later phase, staking rewards may be paid in pUSD instead of DOT inflation, requiring:

    (source)

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--git a/proposed/00xx-smart-contracts-coretime-chain.html b/proposed/00xx-smart-contracts-coretime-chain.html index f53b65d..806500c 100644 --- a/proposed/00xx-smart-contracts-coretime-chain.html +++ b/proposed/00xx-smart-contracts-coretime-chain.html @@ -90,7 +90,7 @@ diff --git a/proposed/0102-offchain-parachain-runtime-upgrades.html b/proposed/0102-offchain-parachain-runtime-upgrades.html index 388c7d1..1c288e9 100644 --- a/proposed/0102-offchain-parachain-runtime-upgrades.html +++ b/proposed/0102-offchain-parachain-runtime-upgrades.html @@ -90,7 +90,7 @@ diff --git a/proposed/0106-xcm-remove-fees-mode.html b/proposed/0106-xcm-remove-fees-mode.html index 405cc58..013748b 100644 --- a/proposed/0106-xcm-remove-fees-mode.html +++ b/proposed/0106-xcm-remove-fees-mode.html @@ -90,7 +90,7 @@ diff --git a/proposed/0111-pure-proxy-replication.html b/proposed/0111-pure-proxy-replication.html index eae72ae..8824e32 100644 --- a/proposed/0111-pure-proxy-replication.html +++ b/proposed/0111-pure-proxy-replication.html @@ -90,7 +90,7 @@ diff --git a/proposed/0112-compress-state-response-message-in-state-sync.html b/proposed/0112-compress-state-response-message-in-state-sync.html index 06e12de..386ebda 100644 --- a/proposed/0112-compress-state-response-message-in-state-sync.html +++ b/proposed/0112-compress-state-response-message-in-state-sync.html @@ -90,7 +90,7 @@ diff --git a/proposed/0114-secp256r1-hostfunction.html b/proposed/0114-secp256r1-hostfunction.html index 3afb593..5e1eb49 100644 --- a/proposed/0114-secp256r1-hostfunction.html +++ b/proposed/0114-secp256r1-hostfunction.html @@ -90,7 +90,7 @@ diff --git a/proposed/0117-unbrick-collective.html b/proposed/0117-unbrick-collective.html index 0f6e34e..e3067f4 100644 --- a/proposed/0117-unbrick-collective.html +++ b/proposed/0117-unbrick-collective.html @@ -90,7 +90,7 @@ diff --git a/proposed/0120-referenda-confirmation-by-candle-mechanism.html b/proposed/0120-referenda-confirmation-by-candle-mechanism.html index ccdd57e..250dcdd 100644 --- a/proposed/0120-referenda-confirmation-by-candle-mechanism.html +++ b/proposed/0120-referenda-confirmation-by-candle-mechanism.html @@ -90,7 +90,7 @@ diff --git a/proposed/0124-extrinsic-version-5.html b/proposed/0124-extrinsic-version-5.html index 26177cf..43fa951 100644 --- a/proposed/0124-extrinsic-version-5.html +++ b/proposed/0124-extrinsic-version-5.html @@ -90,7 +90,7 @@ diff --git a/proposed/0138-invulnerable-collator-election.html b/proposed/0138-invulnerable-collator-election.html index 43ef0b9..ec7600e 100644 --- a/proposed/0138-invulnerable-collator-election.html +++ b/proposed/0138-invulnerable-collator-election.html @@ -90,7 +90,7 @@ diff --git a/proposed/0145-remove-unnecessary-allocator-usage.html b/proposed/0145-remove-unnecessary-allocator-usage.html index cfc6bc9..22b6597 100644 --- a/proposed/0145-remove-unnecessary-allocator-usage.html +++ b/proposed/0145-remove-unnecessary-allocator-usage.html @@ -90,7 +90,7 @@ diff --git a/proposed/0150-voting-while-delegating.html b/proposed/0150-voting-while-delegating.html index bba9b08..bb623e6 100644 --- a/proposed/0150-voting-while-delegating.html +++ b/proposed/0150-voting-while-delegating.html @@ -90,7 +90,7 @@ diff --git a/proposed/0152-decentralized-convex-preference-coretime-market-for-polkadot.html b/proposed/0152-decentralized-convex-preference-coretime-market-for-polkadot.html index c0e11b1..aa96db9 100644 --- a/proposed/0152-decentralized-convex-preference-coretime-market-for-polkadot.html +++ b/proposed/0152-decentralized-convex-preference-coretime-market-for-polkadot.html @@ -90,7 +90,7 @@ diff --git a/proposed/0154-multi-slot-aura.html b/proposed/0154-multi-slot-aura.html index 4d32aa2..d430cfb 100644 --- a/proposed/0154-multi-slot-aura.html +++ b/proposed/0154-multi-slot-aura.html @@ -90,7 +90,7 @@ @@ -270,7 +270,7 @@ This approach is compatible with the Slot-Based collation and the currently depl - @@ -284,7 +284,7 @@ This approach is compatible with the Slot-Based collation and the currently depl - diff --git a/proposed/0155-polkadot-dollar.html b/proposed/0155-pUSD.html similarity index 67% rename from proposed/0155-polkadot-dollar.html rename to proposed/0155-pUSD.html index 0841754..b47369e 100644 --- a/proposed/0155-polkadot-dollar.html +++ b/proposed/0155-pUSD.html @@ -4,7 +4,7 @@ - RFC-0155: Polkadot$ - Polkadot Fellowship RFCs + RFC-0155: pUSD (Polkadot USD over-collateralised debt token) - Polkadot Fellowship RFCs @@ -90,7 +90,7 @@ @@ -177,7 +177,7 @@

    (source)

    Table of Contents

    -

    RFC-0155: Polkadot$

    +

    RFC-0155: pUSD (Polkadot USD over-collateralised debt token)

    @@ -221,48 +222,50 @@
    Start Date2025-09-11
    DescriptionPolkadot native stablecoin on Asset Hub

    Summary

    -

    Polkadot$ / Polkadot Dollar / PDD (exact name TBD) is a new DOT-collateralized stablecoin deployed on Asset Hub. It is an overcollateralized stablecoin backed purely by DOT. The implementation follows the Honzon protocol pioneered by Acala.

    +

    pUSD (Polkadot USD over-collateralised debt token) is a new DOT-collateralized stablecoin deployed on Asset Hub. It is an overcollateralized stablecoin backed purely by DOT. The implementation follows the Honzon protocol pioneered by Acala. In addition, this RFC introduces an opt-in pUSD Savings module that lets holders lock pUSD to earn interest funded from stability fees.

    Motivation

    "Polkadot Hub should have a native DOT backed stable coin because people need it and otherwise we will haemorrhage benefits, liquidity and/or security." - Gav

    -

    Primary use cases of PDD:

    +

    Primary use cases of pUSD:

    Stakeholders

    Explanation

    -

    PDD is implemented using the Honzon protocol stack used to power aUSD, adapted for DOT-only collateral on Asset Hub.

    +

    pUSD is implemented using the Honzon protocol stack used to power aUSD, adapted for DOT-only collateral on Asset Hub.

    Protocol Overview

    The Honzon protocol functions as a lending system where users can:

    1. Deposit collateral: Lock DOT as collateral in Collateralized Debt Positions (CDPs).
      2. -
    2. Mint PDD: Generate PDD stablecoins against collateral value.
      3. -
    3. Accrue interest: Pay interest over time via the debit exchange rate.
      4. +
    4. Mint pUSD: Generate pUSD stablecoins against collateral value.
      5. +
    5. Accrue interest: Pay interest over time via the debit exchange rate (stability fee).
    6. Maintain health: Keep CDPs above the liquidation ratio to avoid liquidation.
    7. Liquidation: Underwater CDPs are liquidated via DEX and/or auctions to keep the system solvent.

    Oracle Infrastructure

    -

    The PDD system relies on robust oracle infrastructure to maintain accurate price feeds for DOT and ensure proper collateral valuations.

    +

    The pUSD system relies on robust oracle infrastructure to maintain accurate price feeds for DOT and ensure proper collateral valuations.

    Oracle source

    Price aggregation mechanism

    Issuance

    -

    DOT holders can open a vault (CDP) to lock their DOT and borrow up to a protocol-defined percentage of its value as PDD, subject to a required collateral ratio and debt ceilings.

    +

    DOT holders can open a vault (CDP) to lock their DOT and borrow up to a protocol-defined percentage of its value as pUSD, subject to a required collateral ratio and debt ceilings.

    Redemption

    -

    At any time, the vault owner can repay PDD (principal plus accrued interest via the debit exchange rate) to unlock DOT, fully or partially.

    +

    At any time, the vault owner can repay pUSD (principal plus accrued interest via the debit exchange rate) to unlock DOT, fully or partially.

    Liquidation

    When a vault's collateral ratio falls below the liquidation ratio, it becomes unsafe and is liquidated. The system employs a tiered liquidation approach to maximize efficiency and minimize market impact.

    Primary liquidation: DEX-first approach

    @@ -286,14 +289,55 @@
  • Bad debt handling: Any shortfalls become bad debt managed by CDP treasury mechanisms.

    • Any excess collateral after repaying debt and penalties is refunded to the owner. Shortfalls become bad debt and are handled by CDP treasury mechanisms.

    +

    Incentives: pUSD Savings (opt-in)

    +

    The protocol includes a Savings module that allows pUSD holders to lock tokens and earn interest paid from stability fees.

    +

    Design goals

    + +

    Mechanics

    + +

    Parameter examples (TBD by governance)

    +

    Governance

    A Financial Fellowship (within the broader Polkadot on-chain governance framework) will govern risk parameters and Treasury actions to ensure economic safety. The Fellowship can also perform emergency actions, such as freezing the oracle price feed if manipulation is detected.

    +

    Governance-managed parameters include (non-exhaustive):

    +

    Emergency Shutdown

    -

    As a last resort, an emergency shutdown can be performed by the Fellowship to halt minting/liquidation and allow equitable settlement: lock oracle prices, cancel auctions, and let users settle PDD against collateral at the locked rates.

    +

    As a last resort, an emergency shutdown can be performed by the Fellowship to halt minting/liquidation and allow equitable settlement: lock oracle prices, cancel auctions, and let users settle pUSD against collateral at the locked rates. Savings deposits remain redeemable 1:1 for pUSD at the last savings index; interest accrual stops at shutdown.

    Drawbacks

    Testing, Security, and Privacy

    Testing requirements

    @@ -302,42 +346,48 @@
  • Integration testing with the Asset Hub DEX to ensure adequate liquidity for liquidation swaps.
  • Emergency-shutdown procedure testing to ensure graceful system halt and equitable settlement.
  • Economic testing of incentive structures for liquidators and system stability.
    • +
  • Savings accounting tests: exchange-rate accuracy, fee-waterfall correctness, boundary cases on caps/cooldowns, and epoch transitions.

    • Security considerations

    Performance, Ergonomics, and Compatibility

    Performance

    -

    This proposal introduces necessary computational overhead to Asset Hub for CDP management and liquidation monitoring. The impact is minimized through:

    +

    This proposal introduces necessary computational overhead to Asset Hub for CDP management, liquidation monitoring, and Savings accounting. The impact is minimized through:

    Ergonomics

    The proposal optimizes for several key usage patterns:

    Compatibility

    Prior Art and References

    The implementation follows the Honzon protocol pioneered by Acala for their aUSD stablecoin system. Key references include:

    Unresolved Questions

    Smart-Contract Liquidation Participation

    @@ -348,11 +398,11 @@
  • Custom logic: Registered smart contracts can implement custom liquidation strategies, such as gradual liquidation over time or cross-chain liquidation via XCM bridges.

    • Treasury Payment Transition

    -

    In a later phase, staking rewards may be paid in PDD instead of DOT inflation, requiring:

    +

    In a later phase, staking rewards may be paid in pUSD instead of DOT inflation, requiring:

    diff --git a/proposed/RFC-114 Adjust Tipper Track Confirmation Periods.html b/proposed/RFC-114 Adjust Tipper Track Confirmation Periods.html index 7ca304b..e0ec76e 100644 --- a/proposed/RFC-114 Adjust Tipper Track Confirmation Periods.html +++ b/proposed/RFC-114 Adjust Tipper Track Confirmation Periods.html @@ -90,7 +90,7 @@ @@ -270,7 +270,7 @@